NEW YORK, N.Y. - Starbucks Corp. on Thursday reported third-quarter net income that fell short of Wall Street expectations and cut its outlook for the current quarter, citing the challenging global economy.

Its shares fell 9.6 per cent in after-hours trading.

The Seattle-based coffee giant said net income rose 19 per cent during the quarter, as global revenue at cafes open at least a year rose 6 per cent. The increase in the metric, which is important to retailers because it excludes the effect of recently opened and closed stores, was driven by growth in China and Asia and the Americas. In the European market, where Starbucks has been struggling to turn around its business, the figure was flat.

"Europe has been a challenge for us all year and continues to be," said Troy Alstead, the company's chief financial officer. But he noted that the flat sales were an improvement from the previous quarter, when the figure slipped 1 per cent.

To perk up its business in the region, Starbucks has been instituting measures similar to those it took during the downturn in the U.S. a few years ago, such as introducing loyalty programs and improving service. CEO Howard Schultz has said he's confident the measures will prove successful.

Still, the company says its store expansions next year will be focused in the United States and the fast-growing China market.

For the three months ended July 1, the company said it earned $333.1 million, or 43 cents per share. That's compared with $279.1 million, or 36 cents per share, a year ago.

Total revenue rose 13 per cent to $3.3 billion.

Analysts on average expected a profit of 45 cents per share on revenue of $3.34 billion.

Starbucks said the higher revenue was the result of increased customer traffic and customers spending more per visit.

For the current quarter, Starbucks cut its profit outlook to 44 cents to 45 cents per share from a range of 46 cents to 47 cents per share. Analysts were predicting 48 cents per share.

Shares dropped $5 to $47.40 in after-hours trading. During the trading day, shares had gained $1.99, or 4 per cent, close at $52.40.